The UK is on track to miss its carbon targets in the 2020s, the government's advisers on climate change warned on Wednesday.

Efforts to cut emissions are not happening quickly enough, and a looming "policy gap" will lead to a shortfall in the investment and infrastructure needed for a low-carbon economy, they said.

Last year, UK greenhouse gas emissions rose by 3.5%, in a setback to the government's plans for stringent "carbon budgets" that stipulate steep falls in emissions from now to 2027. The rise was owing to the cold winter and more power coming from coal, which is currently cheap.

The committee on climate change, in its annual progress report, said this was a temporary increase and the UK was likely to meet its carbon reduction goals for 2017. But it warned that without strong measures the UK would miss its carbon reduction targets from 2017 to 2027. When the effects of last year's rise are stripped out, the underlying emissions trend is for a 1% to 1.5% decrease in emissions each year – less than half the 3% annual reductions needed to meet longer-term climate goals.

David Kennedy, chief executive of the committee (CCC), a statutory body that advises ministers on meeting climate targets, told the Guardian: "There has been some positive progress, but there is clearly still a big challenge and we should not be complacent. If we stop now with policy, all we are doing is storing up risks for the future."

He warned that the government should not see its current energy bill – now passing through the Lords – as showing that energy policy "had been done for this parliament". Instead, he said the reforms in the bill should be built on with stepped-up policies to encourage the take-up of new low-carbon technologies, and to give investors clear signals which would spur the investment in the UK's energy, transport and waste infrastructure that will be needed to cut emissions further.

Recent progress on cutting emissions, with new windfarms being constructed, millions of lofts and a rising number of cavity walls being insulated, and improvements in the efficiency of cars, is unlikely to be repeated at the same rates unless new measures are brought in. The new windfarms were planned under the generous "renewable obligation" subsidy scheme, which is being replaced with a more complex system of long-term energy supply contracts, and the rise in home insulation occurred under an old regime of financial support from energy companies which is also being replaced, with the green deal system of loans to homeowners that are repaid through additions to energy bills. "There are serious risks that the level of progress will not be maintained," said Kennedy. "There are gaps in the policy framework incentives."

The CCC called for the government to review and strengthen the green deal, which has been slow to get off the ground since its launch in January. New figures to be released on Thursday are expected to show a smaller number of homes insulated under the scheme than ministers had hoped. The CCC said more should be done to ensure the take up of solid wall insulation, and in the deployment of low-carbon heat technology, such as heat pumps.

In industry, there has been little sign of improvements in energy efficiency, the report concluded.

Demonstration projects for carbon capture and storage technology should also be brought forward, the CCC said, and warned that "the slow movement of offshore wind projects into construction suggests that investments are now being delayed" until the government's planned electricity market reforms are implemented.

Banning food waste from landfill is another possible route to cutting emissions that should be considered, according to the committee, and farmers should be more closely monitored to check on whether emissions from agriculture are falling as fast as they need to.

Ed Davey, the energy and climate change secretary, said: "The UK takes its obligations under the Climate Change Act, to cut emissions by 80% by 2050, very seriously. That is why we are on course to overachieve against the first three carbon budgets, taking us to 2022. We are also working to encourage other countries to follow our lead; for example, pushing for the EU to adopt a 50% emissions reduction target by 2030, as part of a global deal in 2015.

"We recognise the challenges ahead in meeting the fourth carbon budget. As stated in our Carbon Plan, we will need additional policies to meet this legally binding goal. We have already published scenarios for how we might achieve the fourth carbon budget and remain committed to doing so."

Gareth Stace, head of climate and environment policy, welcomed the CCC's call to invest more in carbon capture and storage, not just for power stations but for industry, but he criticised the findings on energy efficiency. "This strong focus on is absolutely right as many energy intensive sectors have only one or two investment cycles until 2050 and it is crucial to get industrial CCS deployable to coincide with them. However, it is surprising that the CCC reports limited evidence of energy efficiency in the industrial sector as our figures from 2012 show that managing energy was identified a key priority for over two thirds of manufacturers."

Green campaigners said the government must listen to the CCC's warnings. Nick Molho, head of climate and energy policy at WWF-UK, said: "The message in this report is clearly 'must try harder'. Dragging our heels over shifting to the low-carbon economy simply means that the costs of reducing emissions will ultimately become higher and the economic benefits smaller. It is a 'lose, lose' approach."